In all the excitement around everything going digital, are the old-school applications supporting core business functions being overlooked? If that is the case, they will inevitably jump to the top of the list of issues when considering digital transformation.
“Legacy” describes core applications that have supported key business functions over a long period of time. They are often in-house developed, typically contain business specific IP and have been the recipient of significant investment during their lifetime. Legacy applications often account for a significant proportion of core functionality within the applications portfolio of established medium to large sized organisations.
There is a lot to like about legacy applications. They are often in-house developed and, through decades of enhancement, support business functions very well. The team supporting the application know the code inside and out and can make functionality enhancements very fast. The support team also have deep knowledge of the business that the application supports so they can work with their business peers to rapidly develop valuable solutions to difficult problems.
All the good aspects of a legacy application lead to issues. The development environment and software infrastructure are most likely obsolete or incur significant maintenance fees. The team supporting the application are aging and the knowledge and experience required for their roles are not readily available in the market. This often leads to a heavy reliance on individuals and a significant risk to the business of staff turnover.
And the ugly…
Legacy applications were written when integration meant something very different and capabilities such as artificial intelligence, straight-through processing, customer intimacy and CI/CD were terms you may hear in sci-fi movies but certainly not in the business world. Attempting to incorporate a legacy application into digital transformation is similar to forcing a square peg through a round hole, but on a grand scale.
No time like the present
The existence of Fintech, Insurtech and all other industry disrupting technology driven start-ups should make long-established market leaders feel somewhere between uncomfortable and terrified. It has been widely reported that Xinja, an Australian neobank, has recently implemented the SAP Cloud for Banking platform in 3 months. This is an example of a new entrant in an established industry having the most modern of digital software weapons to wield against its competitors.
A staged transition away from a legacy application can be a 3 to 5 year process. These are some actions to consider when planning your legacy transition…
- Stabilise the environment. Ensure the application and the support team are providing an appropriate level of support to the business
- Start looking at your data. Data is a key element of an application change and one of the greatest challenges
- Get the business on board. Legacy transition must be a business led initiative
- Identify key IP. Decades of custom development yields functionality providing differentiation and competitive advantage
- Take an architectural approach. View the legacy application at a modular functional level and develop architectural principles to guide the transition
- Assess and prioritise. Based on business capability and technical feasibility, consider which functional modules can be isolated, rewritten or replaced
- Consider all alternatives. Consider all options to transition modules to cloud based services or inhouse solutions based on architectural principles, time, cost, risk and business capability
- Go for quick wins. Start the transition with initiatives that rapidly provide tangible value to the business or reduce risk.
At this moment, all legacy applications should be in a state of transition. Taking no action is not an option as competitors wielding modern digital technology are enjoying a window of competitive opportunity.
Adam Brougham is a Principal Consultant in Frazer Walker’s Information Technology Practice specialising in IT Strategy and Legacy Transition.
To learn more, Adam can be contacted on Phone: +61 405 646 185 or